Zymeworks Inc. (ZYME) Cash Flow Statement

The OCF/NI ratio oscillated wildly, from 5.21 in 2025Q2 to 0.24 in 2025Q4, indicating that net income is not a reliable proxy for cash generation. The 2026Q2 net loss of -$45.0B versus operating cash outflow of -$77.7M implies a substantial non-cash charge, likely an impairment or fair value adjustment, which investors should monitor as it may not reflect recurring cash burn. Stock-based compensation of $18.3M in 2026Q2 adds to the cash drain, but the gap between net income and OCF suggests earnings quality is heavily influenced by accounting adjustments rather than operational cash flows.

The trajectory shows a clear inflection point at 2025Q2, the only quarter with positive FCF, driven by a licensing revenue spike that has since vanished. Subsequent quarters show FCF losses widening from -$3.7M in 2025Q1 to -$77.9M in 2026Q2, indicating that the company's cash burn has accelerated as revenue dropped to zero. This suggests that Zymeworks is now funding operations entirely from its balance sheet, and the negative FCF margin of -19.0% in 2026Q1, though data for 2026Q2 is unavailable, points to a deteriorating cash position that may require external financing.

The consistently low CapEx, ranging from $16K to $900K per quarter, suggests that Zymeworks' operations are not capital-intensive, consistent with a biotech focused on R&D rather than manufacturing. The spike in CapEx/Revenue to 27.8% in 2025Q4 is a function of collapsed revenue rather than increased investment, as absolute CapEx remained below $1M. This implies that depreciation and amortization charges, which averaged around $3M per quarter, are not being replaced by new capital spending, potentially leading to a shrinking asset base over time.

The working capital adjustments show no consistent trend, with positive changes in some quarters (2025Q4, 2025Q1, 2024Q3) and negative in others, suggesting that cash collections and payments are lumpy, likely due to milestone-based licensing agreements. The -$17.2M working capital drag in 2026Q2, combined with zero revenue, may indicate that the company is paying down liabilities or building receivables without corresponding cash inflows. This volatility complicates cash flow forecasting and suggests that management's ability to manage working capital is constrained by the irregular nature of partnership deals.

The buyback activity is striking because it occurred during a period of escalating operating losses and collapsing revenue, suggesting that management may be using cash reserves to support the stock price rather than preserving liquidity. With no dividends paid and acquisitions not disclosed, the buybacks represent the primary use of cash beyond operations, totaling over $200M in the last two quarters. This deployment strategy appears inconsistent with the company's deteriorating cash flow, and investors should monitor whether this reflects a strategic repurchase program or a response to external pressures.